Citation Nr: 0109309
Decision Date: 03/29/01 Archive Date: 04/03/01
DOCKET NO. 00-10 988 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Houston,
Texas
THE ISSUE
Entitlement to waiver of recovery of an overpayment of VA
widow's pension benefits in the amount of $1,043.00.
ATTORNEY FOR THE BOARD
D. Orfanoudis, Counsel
INTRODUCTION
The veteran served on active duty from July 1942 to May 1946.
The veteran died in May 1995. The appellant in this matter
is the veteran's spouse.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a November 1999 decision of the
Committee on Waivers and Compromises (Committee) of the
Houston, Texas, Department of Veterans Affairs (VA) Regional
Office (RO), which granted in part the appellant's request for
entitlement to waiver of the overpayment. The original amount
of overpayment had been determined to be $10,826.00. The
Committee determined that the appellant was entitled to a
waiver in the amount of $9,783.00, but that she was not
entitled to a waiver in the amount of the remaining $1,043.00,
which represented the amount already recovered by a prior
amended award action. The appellant filed a timely notice of
disagreement with the Committee's decision and perfected a
substantive appeal.
FINDINGS OF FACT
1. All relevant evidence necessary for an equitable
disposition of the appellant's claim for waiver of
overpayment has been obtained.
2. There is no indication of fraud, misrepresentation, or
bad faith by the appellant.
3. The appellant was notified that she was entitled to VA
widow's pension benefits in December 1996 in an amount
payable based upon a reported zero dollars annual income and
no dependents. The notice set forth that the appellant was
responsible for immediately reporting changes in income,
dependency status or address.
4. In September 1998 the appellant was provided a reminder
letter from the RO which reiterated that if she did not
report any changes in income or dependency status, an
overpayment could be created.
5. The appellant did not inform VA that she had been
receiving Social Security income until December 1998, which
resulted in the overpayment.
6. Based upon information regarding the appellant's Social
Security income from December 1996, her benefits were amended
to reflect such additional income in April 1999.
7. By letter dated in November 1999, VA notified the
appellant that her request for a waiver had been granted in
part, in the amount of $9,783, and had been denied in part,
the amount of $1,043 which had already been recovered.
8. The appellant was at fault in the creation of the
overpayment.
9. It is not shown that recovery of the overpayment of
compensation benefits would deprive the appellant of basic
necessities of life.
10. Failure to recover the overpayment would result in an
unfair gain to the appellant.
11. Recovery of the overpayment does not defeat the purpose
for which compensation benefits were awarded.
12. The appellant is not shown to have changed her position
to her detriment as a result of reliance on the compensation
benefits at issue.
CONCLUSIONS OF LAW
1. The overpayment was not created through fraud,
misrepresentation of a material fact, or bad faith on the
part of the appellant. 38 U.S.C.A. § 5302(c) (West 1991); 38
C.F.R. §§ 1.962(b), 1.965(b) (2000).
2. Recovery of an overpayment of compensation benefits in
the amount of $1,043.00 would not be against equity and good
conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991 & Supp.
2000); 38 C.F.R. §§ 1.963(a), 1.965(a) (2000).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
Preliminary Matters
The appellant is seeking entitlement to a waiver of
overpayment in the amount of $1,043.00, which represents the
amount recovered by VA from an original overpayment of
$10,826.00, and for which the Committee has not granted a
waiver.
In the interest of clarity, the Board will review the law, VA
regulations and other authority which are generally relevant
to this case; briefly describe the factual background of the
claim; and then proceed to analyze the issue and render a
decision.
Duty to Assist
The Board notes that there has been a significant change in
the law during the pendency of this appeal. On November 9,
2000, the President signed into law the Veterans Claims
Assistance Act (VCAA) of 2000, Pub. L. No. 106-475, 114 Stat.
2096 (2000).
Among other things, this law eliminates the concept of a
well-grounded claim, redefines the obligations of VA with
respect to the duty to assist, and supersedes the decision of
the United States Court of Appeals for Veterans Claims
(Court) in Morton v. West, 12 Vet. App. 477 (1999), withdrawn
sub nom. Morton v. Gober, No. 96-1517 (U.S. Vet. App. Nov. 6,
2000) (per curiam order), which has held that VA cannot
assist in the development of a claim that is not well
grounded.
This change in the law is applicable to all claims filed on
or after the date of enactment of the VCAA of 2000, or filed
before the date of enactment and not yet final as of that
date. VCAA of 2000, Pub. L. No. 106-475, § 7, subpart (a),
114 Stat. 2096 (2000).
By virtue of the Committee's notices and determinations,
including a statement of the case, the appellant was given
adequate notice of the pertinent regulations pertaining to
her claim for waiver of an overpayment of her pension
benefits. VCAA of 2000, Pub. L. No. 106-475, § 3(a), 114
Stat. 2096, 2096-97 (2000) (to be codified as amended at
38 U.S.C. § 5103).
Criteria
Under relevant law and regulations, an improved death pension
is a benefit payable by the VA to a veteran's surviving
spouse because of the veteran's nonservice-connected death.
Basic entitlement exists if, among other things, the
surviving spouse meets the net worth requirements and has an
annual income not in excess of the applicable maximum annual
pension rate. 38 U.S.C.A. § 1521(c); 38 C.F.R. §§ 3.3(b)(4),
3.23, 3.24, 3.274 (2000). The maximum annual rate is
periodically increased from year to year. 38 C.F.R. §
3.23(a) (2000). Payments of any kind from any source shall
be counted as income during the 12-month annualization period
in which received unless specifically excluded. 38 C.F.R. §
3.271(a) (2000).
A person who is receiving pension benefits is required to
report to the VA in writing any material change or expected
change in his or her income, net worth, or other circumstance
that affects the payment of benefits. 38 U.S.C.A. § 1506
(West 1991); 38 C.F.R. §§ 3.277, 3.660 (2000).
Overpayments created by the retroactive discontinuance of
pension benefits will be subject to recovery unless waived.
38 C.F.R. § 3.660(a)(3) (2000).
Recovery of overpayment of any benefits made under laws
administered by VA shall be waived if there is no indication
of fraud, misrepresentation, or bad faith on the part of the
person or persons having an interest in obtaining the waiver.
38 U.S.C.A. § 5302(c) (West 1991); 38 C.F.R. § 1.963(a)
(2000).
If there is no indication of fraud, misrepresentation, or bad
faith in the record, the indebtedness shall be waived if the
recovery of the overpayment would be against equity and good
conscience. 38 U.S.C.A. § 5301(a) (West 1991); 38 C.F.R. §§
1.962, 1.965 (2000).
Consideration of equity and good conscience is intended to
reach a result that is not unduly favorable or adverse to
either the claimant or the Government. It is intended to
achieve a result that is fair. 38 C.F.R. § 1.965(a) (2000).
Six non-exclusive elements are set forth in the regulations
that must be addressed to determine whether the facts and
circumstances in a particular case dictate that collection of
an overpayment would be against equity and good conscience.
The following six elements, which are not intended to be all
inclusive consist of: (1) the fault of the debtor; (2)
balancing of faults between the debtor and the VA; (3) undue
hardship of collection on the debtor; (4) a defeat of the
purpose of an existing benefit to the appellant; (5) the
unjust enrichment of the appellant; and (6) whether the
appellant changed positions to his/her detriment in reliance
upon a granted VA benefit. 38 U.S.C.A. § 5302; 38 C.F.R. §
1.965(a) (2000). Each of the six elements must be addressed.
See Ridings v. Brown, 6 Vet. App. 544, 546 (1994).
Factual Background
Initially, the Board points out that the amount of the debt
is not in issue. In
November 1996, the appellant submitted an application for
pension benefits. At that time, she reported no dependents
and no income. In December 1996, the RO notified the
appellant that she was entitled to the maximum standard
pension benefit based upon the reported zero dollars annual
income and no dependents. The notice set forth that the
appellant was responsible for immediately reporting changes
in income, dependency status or address.
In September 1998 the appellant was provided a reminder
letter from the RO which reiterated that if she did not
report any changes in income or dependency status, an
overpayment could be created. In December 1998, the
appellant informed the RO that she had been receiving Social
Security income.
Based upon information regarding the appellant's Social
Security income which showed that she had been in receipt of
Social Security benefits from October 1996, the RO determined
that the appellant had received Social Security income in
1996 in the amount of $4,392. By letter dated in February
1999, it was proposed that her benefits be reduced effective
as of December 1996, so that the overpayment which was
created may be recovered.
By letter dated in April 1999, the RO notified the appellant
that, pursuant to the February 1999 proposal, her pension
benefits had been reduced effective as of December 1996, so
that the overpayment which was created could be recovered.
The period of overpayment was from December 1, 1996 through
March 31, 1999.
In September 1999 the appellant requested that the
overpayment be investigated, and advised that she did not
believe an overpayment had been created.
Received in October 1999 was a Financial Status Report (VA
Form 20-5655) signed by the appellant. At that time the
appellant indicated that she was a widow with no dependents.
Under net monthly income, the appellant indicated that she
received monthly compensation in the amount of $382.00
(Social Security) and $102.00 (VA). The total monthly net
income was $490.00. The appellant listed her average monthly
expenses as follows:
Average Monthly Expenses
Amount (Pesos)
(USD as per
RO)
Rent or mortgage payment:
Food:
Other living expenses:
Personal medical caretaker:
800.00
2,000.00
5,000.00
2,000.00
$ 10.12
$ 197.65
$ 494.08
$ 197.63
Total Monthly Expenses:
9,800.00
$968.40
As the appellant's combined monthly net income was said to be
$490.00 and her total monthly expenses were said to be
$968.40, her net monthly negative balance was $478.40.
In November 1999, the Committee granted, in part, the
appellant's claim for a waiver of the indebtedness. At that
time the Committee found that the appellant demonstrated a
small degree of excusable fault in the creation of the debt.
The Committee considered her personal background, including
age, health, experience, and understanding at the time the
debt was created. It was shown that current and near future
income, net worth, and expenses, were such that collection of
the balance of the debt would have impaired the ability to
provide for basic necessities. Therefore, the Committee
concluded that financial hardship did exist, and collecting
the debt would defeat the purpose of the benefit. Based upon
this, the Committee granted a waiver in the amount of
$9,783.00.
The Committee also determined that the withholding of a
portion of the appellant's benefits that was applied to the
debt did not cause an undue financial hardship, as it was
taken from retro benefits. The Committee concluded that the
appellant would be unjustly enriched if said funds were to
have been refunded to her, causing her, in essence, to be
paid twice for the same period of time. Accordingly, the
Committee denied the request for waiver in the amount of
$1,043.00.
In January 2000, the appellant filed a notice of disagreement
with the decision of the Committee, requesting that a waiver
be granted in the amount of $1,043.00, which represented the
amount that had not been waived. In May 2000, the appellant
perfected a substantive appeal.
Analysis
The Board initially notes that the duty to assist has been
satisfied in this instance. The RO has made reasonable
efforts to obtain evidence necessary to substantiate the
appellant's claim, including any relevant records adequately
identified by the appellant as well as authorized by her to
be obtained. VCAA of 2000, Pub. L. No. 106-475, § 3(a), 114
Stat. 2096 (2000) (to be codified at 38 U.S.C.A. § 5103A(b));
see also McKnight v. Gober, 131 F.3d 1483 (Fed. Cir. 1997);
Epps v. Brown, 9 Vet. App. 341, 344 (1996), aff'd sub nom.
Epps v. Gober, 126 F.3d 1464 (Fed. Cir. 1997).
In light of the foregoing, the Board is satisfied that all
relevant facts have been adequately developed to the extent
possible; no further assistance to the appellant in
developing the facts pertinent to her claim is required to
comply with the duty to assist the appellant as mandated by
the VCAA of 2000, Pub. L. No. 106-475, § 3(a), 114 Stat. 2096
(2000) (to be codified at 38 U.S.C.A. § 5103A)).
Congress recently passed the VCAA of 2000, Pub. L. No. 106-
475, 114 Stat. 2096 (2000), modifying the adjudication of all
pending claims. As set forth above, the new law revises the
former 38 U.S.C.A. § 5107(a) to eliminate the requirements
that a claimant come forward first with evidence to well
ground a claim before the Secretary is obligated to assist
the claimant in developing the facts pertinent to the claim.
It also specifically enumerates the requirements of the duty
to assist.
In the case at hand, the Board finds that the appellant is
not prejudiced by its consideration of her claim pursuant to
this new law without it first being considered by the RO. As
set forth above, VA has already met all obligations to the
appellant under this new law. Moreover, the appellant has
been afforded the opportunity to submit evidence and argument
on the merits of the issues on appeal, and has done so. In
view of the foregoing, the Board finds that the appellant
will not be prejudiced by its actions and that a remand for
adjudication by the RO would only serve to further delay
resolution of the appellant's claim. See Bernard v. Brown, 4
Vet. App. 384, 392-94 (1993).
Having determined that the duty to assist has been satisfied,
the Board turns to an evaluation of the appellant's claim on
the merits.
As indicated herein above, recovery of overpayments of any
benefits made under laws administered by the VA shall be
waived if there is no indication of fraud, misrepresentation,
or bad faith on the part of the person or persons having an
interest in obtaining the waiver and recovery of the
indebtedness from the payee who received such benefits would
be against equity and good conscience. 38 C.F.R. § 1.963(a)
(2000). The RO did not find fraud, misrepresentation or bad
faith. The Board concurs with the RO that there was no
willful failure on the appellant's part to disclose a
material fact with an intent to obtain or retain eligibility
for VA benefits, and thus there is no fraud,
misrepresentation, or bad faith.
Nevertheless, before recovery of indebtedness can be waived,
it must also be shown that it would be against the principles
of equity and good conscience to require the appellant to
repay the debt to the government. 38 C.F.R. §§ 1.963, 1.965
(2000).
The standard of "Equity and Good Conscience" will be applied
when the facts and circumstances in a particular case
indicate a need for reasonableness and moderation in the
exercise of the Government's rights. The decision reached
should not be unduly favorable or adverse to either side.
The phrase equity and good conscience means arriving at a
fair decision between the obligor and the government. In
making this determination, consideration is given to the
following elements of 38 C.F.R. § 1.965(a), which are not
intended to be all inclusive:
1. Fault of the debtor. Whether the actions of the debtor
contributed to the creation of the debt.
2. Balancing of faults. Weighing of the fault of the debtor
against that of the VA.
3. Undue hardship. Whether collection would deprive the
debtor or family of basic necessities.
4. Defeat the purpose. Whether withholding of benefits or
recovery would nullify the objective for which benefits were
intended.
5. Unjust enrichment. Whether failure to make restitution
would result in unfair gain to the debtor.
6. Changing position to one's detriment. Whether reliance
on VA benefits resulted in relinquishment of a valuable right
or the incurrence of a legal obligation.
The appellant asserts that she is sick and that she requires
permanent medical treatment. She indicated that her medical
costs were great and that she did not have enough money for
her daily living expenses, which include rent, food and
transportation. While the Board does not question the
appellant's intentions, it must assert that as she failed to
disclose her Social Security income, at least a small degree
of fault of the overpayment lies with the appellant. She was
on notice from the RO to provide prompt information for the
change of status, to include income. VA showed no fault in
the creation of this debt, thus the appellant exhibited a
greater degree of fault.
As the Committee has already conceded, while the collection
of the overpayment in the amount of $9,783.00 would have
proved to create undue hardship on the appellant, a waiver in
the amount of $1,043.00 would not as this occurred when VA
amended the appellant's award effective February 1, 1998 to
January 1, 1999, giving her credit for unreimbursed medical
expenses during 1998. This action was authorized in
September 1999, and since the appellant had not been paid
from February 1998 to January 1999, she was not entitled to
the $1,043.00.
VA cannot refund benefits to which the appellant had no legal
entitlement. To do so would result in being paid twice for
the same benefit in the same period of time. In view of the
foregoing, it has not been shown that financial hardship
would result from failure to refund the amount of $1,043.00.
Rather, a refund which would result in being paid twice would
result in the unjust enrichment of the appellant. The Board
also finds that failure to make restitution of the full
amount of the remaining overpayment would not defeat the
purpose of pension benefits. Finally, it has neither been
alleged nor shown that reliance on the appellant's pension
benefits resulted in relinquishment of a valuable right or
the incurrence of a legal obligation.
For the reasons stated above, the Board finds that a
preponderance of the evidence is against the appellant's
claim for waiver of recovery of overpayment.
ORDER
Entitlement to a waiver of recovery of an overpayment of
compensation benefits in the amount of $1,043.00 is denied.
RONALD R. BOSCH
Member, Board of Veterans' Appeals